Event
The company released its semi-annual report on the evening of August 2, 2022. In the first half of 2022, the company realized revenue of 3.206 billion yuan, an increase of 99.82% over the same period last year, realized net profit of 240 million yuan, up 0.67% over the same period last year, deducted 268 million yuan of non-return net profit, an increase of 44.57% over the same period last year, and realized EPS of 0.2457 yuan.
Comment
The net profit of Q2 deduction from non-return to home increased significantly. Q2 company deducted non-homed net profit of 176 million yuan, an increase of 93.4% over the previous year, and a year-on-year increase of 27.5%. The non-recurrent profit and loss of 10 million yuan was mainly due to the fair value change loss caused by holding Oceanic Electric. Q2 company gross profit margin 24.52%, month-on-month increase 1.51pcts, rare earth raw material price transmission smoothly, profitability rebounded; sales expense rate 1.6%, month-on-month reduction of 2.2 pcts; research and development expenses increased by 21% month-on-month, the company through the production process and process optimization to achieve cost reduction and efficiency.
The production capacity of NdFeB continues to expand. At present, the company's NdFeB billet annual production capacity of 15000 tons, Baotou 15000 tons of high-performance NdFeB blank project has been successfully started, is expected to be put into production by the end of 23. In 22-23, the annual production capacity of NdFeB blank will reach 19000 tons and 34000 tons respectively. In addition, the company continues to promote innovative technology research and development, currently has a grain boundary diffusion capacity of 6000 tons / year, is expected to reach 10,000 tons / year at the end of Q3.
Focus on three downstream application areas. 1) New energy vehicles: revenue in the first half of the year exceeded 600 million yuan, an increase of more than 2.5 times over the same period last year, accounting for 23% of the revenue. In the first half of the year, the company has a total of 494000 NdFeB main drive motors in China, with a market share of about 18.6%. The company has entered the supply chain of BYD (first supply), NIO Inc., XPeng Inc., mainland and Schaeffler, and cooperated with founder Motor, Wolong Electric Drive and so on. 2) Consumer electronics:
Revenue in the first half of the year exceeded 900 million yuan, an increase of nearly 70 percent over the same period last year, accounting for 35 percent of the revenue. The company's VCM magnets have a 30% global market share; electroacoustic magnets have stepped up the development of Android mobile phone projects; and mobile phone vibration motor magnets are deeply bound to iPhone. 3) Industrial and other applications: revenue in the first half of the year was about 1.1 billion yuan, an increase of more than 50% over the same period last year, accounting for 42% of revenue. The company is a supplier of CNR, Huichuan Technology, Gree Electric Appliances, Panasonic, Mitsubishi Electric and other enterprises, making further breakthroughs in industrial energy-saving motors, elevator traction machines and wind power generation markets and strengthening the development of traditional automobile markets.
Profit Forecast & Investment suggestion
It is estimated that the 22-24 return net profit of the company is 550 million yuan, 652 million yuan and 731 million yuan respectively, and the corresponding EPS is 0.56,0.66,0.74 yuan respectively, and the corresponding PE is 24 times, 13 times and 11 times respectively.
Risk hint
Rare earth raw material price fluctuation risk; downstream demand growth is not as expected; RMB exchange rate fluctuation risk and so on.